Time to Wake Up to Reality

If I were a Welsh or Scottish Nationalist, I would be very tempted to start a campaign to rid my local politics of both these women and anybody else in the party leadership who were so dumb as to come out with the stuff these two do. The idea that if England voted to leave the EU, the Celtic nations would have a veto on that decision, is not just utter nonsense, it betrays a lack of awareness of the realities of the UK.

Although admittedly in the Telegraph which would seize on such quotes, never the less, it was said. http://www.telegraph.co.uk/news/newstopics/eureferendum/11398744/Scottish-and-Welsh-nationalists-pledge-to-stop-the-English-leaving-EU.html

Independent Celtic Nations

There is absolutely no reason why each of the three Celtic nations couldn’t become independent countries outside of the UK if they so wished but each would have to accept that in terms of public spending, they would have vastly reduced budgets if they did. Relying solely on internally raised taxes, they would not be able to afford the level of social spending or even the health service they currently enjoy, the range of benefits that they could deliver to their electorates would be vastly diminished.

The majority of Scots know this too which despite the far higher cost of crude oil then, they rejected independence. It is also why now with oil revenue having tanked, these same Scots will send a substantial number of SNP MPs to Westminster at the general election just to ensure ‘Scotland extracts the most money possible’ from the UK, this is not a vote for independence however the SNP may try to portray it, it is an acknowledgement of the reality by the Scottish electorate.

Instead of playing stupid games, whether the SNP, Plaid or Sinn Fein, it would be far better that the nationalists acknowledged the “Nature of the beast” and worked with the grain instead of against it because ultimately they are all reliant on the good will of the taxpayers in England.

Note the phrase, “…the good will of the taxpayers in England” and not “the English taxpayers”. True it was the English who long ago established a distinct tolerance to all people within the British Isles on the basis of them being “family and extended family” but the cosmopolitan nature that is England means that people living in England are far more diverse than those living in any Celtic country. The point is that Trust and Goodwill are as easily spent as actual cash and the shrill hectoring built often on imagined grievances, is increasingly striking a discordant note and carried on, will totally poison the atmosphere.

The Big Beast

England is the “Big Beast” and no amount complaining will wish that fact away any more than bemoaning London being the administrative centre of the UK as it has been since the days of the Romans. The fundamental truth is that both England and London will always be a magnet for young people from the Celtic nations and even more so if those nations were independent.

I have written before that as someone growing up in London and with the occasional visits to Wales and the Irish Republic, I soon realised that there were two types of Celts, the ‘stay at homes’ and the ‘adventurous wanderers’. As an Irish friend who was a musician said to me, “I can scratch a living in Dublin or, have a shot at doing a something more in London”.

The point is that for the young and whatever their skills, England and London will always be the destination for talent even if as a jumping off point to other parts of the English speaking world, there is and always will be a “talent drain” from the Celtic countries and regardless of their political status. In fact, if the Celtic countries were independent, it would considerably worsen the situation leaving them being mainly populated by the very young or very old with people ‘in the middle’ all living and working elsewhere.

How to Deal With That

I personally disagreed with all the promises made to Scotland by Westminster politicians towards the end of the Referendum, the whole idea of Devo Max was a nonsense. The one thing that binds the UK together is a common benefits and taxation system, deviating from that and especially for the Celtic nations is dangerous and should be avoided at all costs.

If the Scottish Government wants to pay higher benefits than the rest of the UK, then it should tax its citizens on top of the standard UK rates so that they, the Scottish electorate know what they are paying for and can therefore hold them (the Scottish government), to account at the ballot box. The problem with the SNP’s version of socialism is that they want it paid for by taxpayers in the rest of the UK and not by Scottish taxpayers alone for policies they apparently endorse and that is obviously not correct at any level.

The problem for all the Celtic nations is that they need to build and develop economies based upon free enterprise in the private sector. It is only by doing so that they can achieve two key objectives: retain their best talent particularly among the young and also build up a tax base that can support the current range of ‘benefits’ that their citizens are used to. Unless or until they can do that, they will do best by being willing and fully engaged members of the UK where they can get the advantages of scale that the UK brings with it.

Although it won’t happen overnight, with the advent of the digital age, where someone is physically located is less relevant except in the sense that for success, being with other talented people who are also engaged in the similar activities, is a definite requirement. People developing their careers or business ideas seem to thrive best with a mixture of competition and synergy to grow their own talents. Creating these kinds of ‘clusters/hubs’ is what the local assemblies should be concentrating on because even trying to have an equal voice with England requires having an equal or better locally generated economy on a per capita basis.

Even then, England will always be bigger/more numerous but it wouldn’t matter because providing the local economy could retain its pool of talent and generate sufficient revenue to support the type of public spending their electorate is used to, independence then becomes a real possibility. This should not be underestimated, the reason Irish reunification can’t happen has little to do with politics and much to do with the level of ‘Benefits’ paid in the North compared to the South. Put another way, the 3.5 million people in the Republic could not afford economically to absorb the 2 million living in the North.

The Worse Example

The SNP were and remain foolishly arrogant because their whole financial plan rested on on thing only, the price of crude oil and that has halved in price leaving the concept of an independent Scotland in tatters. But the real lesson here is not just about relying on the “Devils Excrement” as the main source of your economy, it is understanding just what it means in the longer term.

The first thing known by all is that the amount of oil was finite, it would run out sooner or later and its financial contribution would be on a downward trajectory long before it did, what the SNP’s plan for that was never fully explained during the independence referendum but a “hope and a prayer” seems most likely. The collapse of the oil price was not expected but market fluctuations are normal in any commodity business except there is a rather nasty sting in the tail of this one for Scotland and the UK.

We know the West’s economy isn’t booming and even China and the other Eastern economies have slowed down so that demand for oil would be expectedly less than during the boom years. However there were two other prime movers in what has happened recently, the success of fracking in the USA so that it has once again become self sufficient in oil and the Saudis deliberately continuing to pump producing a market awash with surplus oil and therefore a collapsed market price. For the Saudis it may well be about them maintaining their market share and influence but the consequences are more serious and especially for “marginal oil fields” of which the North Sea is most certainly one.

North Sea oil wasn’t ‘suddenly discovered’, it was known about for a long time but didn’t become viable until the price of oil in the market rose beyond a given level which it did and then extracting it became economic. The problem today is these are now ‘mature fields’ than need a price per barrel in the region of $80 to reach break even so $55 a barrel is suicidal. The exploration companies, even if the price had remained above £100 a barrel would have started winding down in the North Sea anyway, this is an international business so why invest in strictly finite resources when less limited ones are available to them ?

The big problem is that oil companies might well not only not invest further in squeezing every little drop out but make the decision to just cap off what is left and pull out completely. If they do, there will never be the incentive to restart operations there. This is a real possibility and the reason is US Shale. Whilst fracking is expensive, far more so than Arabian crude, it is also transitory by nature, areas are exploited then all the rigs and production units up sticks and move to a new location to start over again. What this means is that it is easier to turn production off and then restart again 6 months later when prices have improved, this is not possible in the North Sea.

As things currently stand, it is only the UK not the Scottish Government that can entice the oil companies to keep as much production going as is feasible because only the UK Government can offer the tax write downs that would make it attractive and economic for them to do so.

Let’s Have Some Good Manners

Rather than Sturgeon telling the English what she is going to do on this and that, a bit of politeness and a lot less bad mouth is required from her, she should not be generating this amount of ill will south of the border, we will no doubt have enough pompous stupidity when Salmond returns to Westminster we don’t need her chipping in too.

Despite all the opinion polls, you just never know what will happen come May, a week is a long time in politics… Let us suppose we have 30 SNP MPs but the English electorate decide to mainly ignore the smaller parties and instead vote either Conservative or Labour so that we have a majority government, things might well get rather interesting and ‘demands’ ignored because the SNP have over played their hand.

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